21 March
2024
Pollen Street Group
Limited
(the
"Company" or together with its subsidiaries the "Group" or "Pollen
Street")
Commencement of Share Buyback
Programme under Pollen Street's Capital Allocation
Framework
Pollen Street is pleased to announce
the commencement of a Share Buyback Programme (the "Buyback
Programme") to purchase ordinary shares ("Ordinary Shares") in the
capital of the Company with a nominal value of 1 pence each up to a
maximum aggregate consideration payable of £30 million. The Buyback
Programme will be carried out in tranches, with the first tranche
commencing on 21 March 2024 and ending on the date of the 2024
Annual General Meeting (and in any event no later than 31 July
2024) with the subsequent tranche commencing after the previous
tranche has ended.
Pollen Street's Capital Allocation Framework
As highlighted in Pollen Street's
Annual Report and Accounts for 2023 announced today, the Group's
balance sheet is in a strong position, with tangible net assets of
£355 million. This enables the Group to provide stable income
whilst accelerating the growth of the Asset Manager through
transitioning the Investment Company assets from predominantly
holding direct Private Credit investments today to investing in
Pollen Street's Private Credit and Private Equity funds.
Under this framework, Pollen Street
Group Limited will maintain sufficient balance sheet capital
to:
1. Invest in funds
managed by the Group to accelerate the growth of the Asset Manager
taking advantage of attractive investment opportunities and
aligning interest with our investors to grow AuM;
2. Support the dividend
policy, which is to declare dividends of no lower than £33 million
in respect of 2024 and dividends growing progressively
thereafter;
3. Provide strategic
flexibility for inorganic growth, should opportunities arise;
and
4. Return surplus
capital to shareholders through share buybacks of approximately 2
to 5 per cent per annum of the outstanding share capital of the
Group
The Group's net
debt-to-tangible-equity ratio was 54 per cent as at 31 December
2023. This is lower than it has been historically (31
December 2022: 69 per cent) to create capacity to make commitments
to Pollen Street managed funds. Pollen Street will continue
to operate with the debt-to-tangible-equity ratio not exceeding 100
per cent.
Rationale for Share Buyback Programme
The Board believes the current share
price presents an attractive investment opportunity for Pollen
Street to enhance balance sheet returns to shareholders. The
Buyback Programme is consistent with Pollen Street's disciplined
approach to capital allocation and reflects the Board's continued
confidence in the prospects of the Group. The purpose of the
programme is to reduce the capital of the Company, with repurchased
shares to be held in treasury to provide flexibility in the
future. Shares held in treasury do not rank
for dividends.
Details of the Share Buyback Programme
Pursuant to the Buyback Programme,
Pollen Street will enter
into non-discretionary instructions with Investec
Bank plc ("Investec") to purchase up to £30 million (excluding
expenses) of the Company's Ordinary Shares with a nominal value of
1 pence each and to make trading decisions under the Buyback
Programme independently of the Company in accordance with certain
pre-set parameters and to the Company's right to terminate the
agreement in limited circumstances. Ordinary Shares acquired
by Investec under the agreement will be sold to the
Company.
The maximum aggregate value of
Ordinary Shares that can be repurchased under the first tranche of
the Buyback Programme is £10,000,000. The Buyback Programme will
take place in accordance with the Company's current buyback
authority granted by shareholders at Pollen Street plc's 2023
Annual General Meeting. The Company intends to renew this authority
at the 2024 Annual General Meeting.
Any acquisitions of shares will be
carried out within certain pre-set parameters and in accordance
with the Company's existing general authority to repurchase
Ordinary Shares and Chapter 12 of the FCA's Listing Rules. The
Group will seek to make market purchases of Ordinary Shares at a
price or prices that the Group believes will be good value for
shareholders. In view of the level of trading liquidity in the
Company's Ordinary Shares, the Group may make purchases in excess
of the price and volume restrictions set out in Article 5(1) of the
Market Abuse Regulation (EU) No 596/2014 (as it forms part of
Retained EU Law as defined in the European Union (Withdrawal) Act
2018) and the Commission Delegated Regulation (EU) No 2016/1052 (as
it forms part of Retained EU Law as defined in the European Union
(Withdrawal) Act 2018), subject to prevailing market conditions and
liquidity. Any repurchase of Ordinary Shares will be announced no
later than 7:30 am on the business day following the calendar day
on which the repurchase occurred.
The Company will make further
announcements in due course following the completion of any
repurchases. There is no guarantee that the Buyback Programme will
be implemented in full or that any Ordinary Shares will be
repurchased by the Company. The Buyback Programme will not impact
the Company's existing Ordinary Share dividend policy, which will
continue unaffected through the regular awards of interim and final
dividends.
At the time of this announcement,
the Company's share capital comprises 64,209,597 Ordinary Shares
with voting rights.
About Pollen Street
Pollen Street is an alternative
asset manager dedicated to investing within the financial and
business services sectors across both Private Equity and Private
Credit strategies. The business was founded in 2013 and has
consistently delivered top tier returns alongside growing
AuM.
Pollen Street benefits from a
complementary set of asset management activities focused on
managing third-party AuM (the "Asset Manager") together with
on-balance sheet investments (the "Investment Company").
The Asset Manager raises capital
from high quality investors and deploys it into its Private Equity
and Private Credit strategies. The strong recurring revenues from
this business enable delivery of scalable growth.
The Investment Company invests in
the strategies of the Group delivering attractive risk adjusted
returns and accelerating growth in third-party AuM of the Asset
Manager through investing in Pollen Street funds, taking advantage
of attractive investment opportunities and aligning interest with
our investors to grow AuM. Today the portfolio is largely invested
in credit assets with the allocation to Private Equity expect to
increase to 30 per cent in the long term. The portfolio consists of
both direct investments and investments in funds managed by Pollen
Street.
POLN is listed on the London Stock
Exchange (ticker symbol: POLN). Further details are available
at www.pollenstreetgroup.com.
For further information about this
announcement please contact:
Pollen Street - Corporate
Development Director
Shweta Chugh
shweta.chugh@pollencap.com
+44 (0)7813581377
FGS Global - Communications
Advisor
Chris Sibbald
Chris.Sibbald@fgsglobal.com
+44 (0)7855955531
Barclays Bank plc - Joint
Broker
Neal West / Stuart Muress
+44 (0)20 7623 2323
Investec Bank plc - Joint
Broker
Ben Griffiths / Bruce
Garrow
+44 (0)20 7597 4000
Link Company Matters Limited -
Company Secretary
polncosec@linkgroup.co.uk